The Study On The Premium Rate And The Tax Expenditures Of The Tax Deferred Pension Insurance

First of all we focus on the analysis of current situation of China’s endowment insurance. At present, aging is severe; the gap of pension reserve is high, as well as the uneven development of the three pillars of endowment insurance.In our country, the pension problem is solved mainly by the support of the first pillar. Despite the high coverage rate for social basic endowment insurance and the low premium, endowment insurance limit is low. It can’t meet the pension insurance needs under the condition of severe aging population and the shortage of the pension reserve. What’s more, it increases the government spending on pension issues. From the practical experience, in spite of the rapid development of enterprise annuity as the second pillar, the scope is limited in some industries and companies being. Commercial pension insurance as a third pillar, which is affected by various factors, develops slowest. Considering of the foreign relatively perfect pension system, the country should accelerate the development of commercial pension insurance, promote the innovation of insurance products. In foreign countries, the governments promote the rapid development of commercial pension insurance mainly by the preferential tax policy. By constrict, in our country, our tax deferred pension insurance takes shape with the support of national policy.Then, by estimating the tax expenditures of a tax deferred pension insurance as well as individual tax rate, we analyze the individuals and the government’s economic burden that is put by tax deferred pension insurance. Based on the current situation of the endowment insurance system applied among the urban employees in Shandong Province of China, and aiming at the public policy of achieving commercial endowment insurance coverage, this article utilizes a tax expenditure model on tax-deferred commercial endowment insurance. Under different parameter hypothesis in TEE and EET models, such as survival rate, inflation rate etc., the calculation results of contribution rates, replacement rates and present value of tax expenditure from the insured of multi-ages show that the implementation of tax-deferred commercial endowment insurance not only increases the immediate disposable income of the insured, but also gives them price privilege due to inter-temporal tax differences as well as reduce the personal financial burden and achieve the policy objectives of commercial pension with a lower rate of payment. For policy-holders who pay the fees under 10 years, although the implementation of a tax deferred pension insurance can increase immediate disposable income for policy-holders, get the benefit through the difference of tax concessions and reduce the personal financial burden, high level of the rate of payment is required to achieve the policy objective. Policyholders who pay the fees about 20 years are in between. For the lower survival rate of male in contrast of female after retirement, pension replacement rate of male is obviously higher than female. By constructing tax expenditure model for tax deferred pension insurance and estimating the government tax expenditures to implement a tax deferred pension insurance, we find that. In the short term, the implementation of a tax deferred pension insurance will reduce the government tax revenue in the current period, but helps to reduce the financial burden on the government In the long term.In the meantime, we research the influence of the tax deferred pension insurance on the overall social welfare. Under the hypothesis that government is rational and has time consistency, and the officials’individual rationality and leader groups’term of services are left out, the implementation reduces the immediate tax revenue. In the social welfare model, however, results show that financial expenditure increment when tax-deferred policy is not carried out is much greater than the tax revenue decrement when it is. And also, tax-deferred insurance helps to improve the efficiency of social security system and overall social welfare.Finally, we try to come up with proposals and comments on implementation of tax deferred pension insurance in our country, through our earlier qualitative and quantitative analysis.